The U.S. remains the world's most competitive economy, although its large federal budget deficit and huge debt are worrisome, according to the IMD World Competitiveness Yearbook 2006, released on May 11.
The U.S. and France "are the two industrial nations that show the biggest difference between the performance of their governments and the performance of their economies," states IMD. "In these two countries, business outperforms government." Economic expansion is taking place even though their governments are running large budget deficits and carrying huge debt loads.
Although for different reasons from the U.S. and France, India and China also display gaps between economic performance and government performance, with governments in both countries facing "the challenge of keeping pace with rapid economic expansion," says IMD. "Their task now is to meet the standards and expectations of a buoyant economy."
Following the U.S. among the world's most competitive economies are China's special administrative area of Hong Kong, Singapore, Iceland and Denmark.
IMD's World Competitiveness Yearbook has been published annually since 1989, and the competitiveness of the 61 national and regional economies it ranks is based on 312 criteria.